Studyportal

Access the information contained in the selected organization’s balance sheet and income statement to calculate the following:

 

·        Liquidity ratios

 

o   Current ratio

o   Acid-test, or quick, ratio

o   Receivables turnover

o   Inventory turnover

 

·        Profitability ratios

 

o   Asset turnover

o   Profit margin

o   Return on assets

o   Return on common stockholders’ equity

 

·        Solvency ratios

 

o   Debt to total assets

o   Times interest earned

 

Upload an excel spreadsheet to show your calculations for each ratio, along with the memo.  This means you should submit two files—1 (Memo) and 2 (Calculations.

 

Create a horizontal and vertical analysis for the balance sheet and the income statement.

 

Write a 500- to 700-word memo to the CEO Riordan Manufacturing in which you discuss your findings from your ratio calculations and your horizontal and vertical analysis. In your memo, address the following questions:

 

·        What do the liquidity, profitability, and solvency ratios reveal about the financial position of the company?

·        Which users may be interested in each type of ratio?

·        What does the collected data reveal about the performance and position of the company?

 

Format your memo consistent with APA guidelines.